New wave of U.S. layoffs feared as coronavirus pain deepens

New wave of U.S. layoffs feared as coronavirus pain deepens

Another 2.1 million people are expected to have filed claims

Job cuts by U.S. state and local governments whose budgets have been crushed fighting the COVID-19 pandemic and more second-wave layoffs in the private sector likely contributed last week to a 10th straight week of more than 2 million Americans seeking unemployment benefits.

The Labor Department’s weekly jobless claims report on Thursday, the most timely data on the economy’s health, is also expected to show the number of people on jobless benefits hitting a new record high in mid-May.

The report is being watched to assess how quickly the economy rebounds after businesses shuttered in mid-March to control the spread of COVID-19 and almost ground the country to a halt. While non-essential businesses are starting to reopen, claims have stayed at astonishingly high levels.

“I am concerned that we are seeing a second round of private sector layoffs that, coupled with a rising number of public sector cut backs is driving up the number of people unemployed,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania.

“If that is the case, given the pace of reopening, we could be in for an extended period of extraordinary high unemployment. And that means the recovery will be slower and will take a lot longer.”

The number of people filing new claims for state unemployment benefits likely totaled a seasonally adjusted 2.1 million for the week ended May 23, down from 2.438 million the prior week, according to a Reuters survey of economists.

Source: Fox

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